Hi Zangiefisgod,
Since you are considering these two swaps, how about telling us how you plan to use the car. This information will be helpful in determining which would be better for your intended purpose. Also, you seem to ahve a figure of 500rwhp in your mind for this project. Why did you choose this figure? I guess this again comes down to what the car will be used for.
Do you want a 10 second 1/4 mile car?
A weekend cruiser?
An autocross car?
A track day car?
A combination of them all?
The reason I bring this up is that you seem to be planning on doing this swap on a $5000 budget and it may be possible that you will be very happy with a 350RWHP car which can be achieved with a stock LS1. Many people get hung up on Building a Killer Motor when all they really want to do is own a cool car with an engine swap. many people also dream of 500RWHP and have never even driven a 500RWHP car.
As the owner of an LS1 powered Z car, I know that in the beginning planning stages of my swap, I considered building killer engine and found that a stock LS1 is plenty of go for my intended uses. Weekend cruiser, track days, auto crosses and a run down the 1/4 mile once in a while.
As for which engine, the LS1 will be an easier swap for $5K and my LS1 gets 31MPG on the hwy at 80mph (1900rpms) in 6th gear. It also runs the 1/4 mile in the 12s and is very reliable. Parts are easy to get if you need them. The low end torque is so nice and makes for a better street car because all the power is right there without having to rev the piss out of it.
By the way, I am in Maryland too. If you want to see how a stock LS1 runs in a Z car, come on down I will take you for a spin. Most people get out of my car and say, "WOW!"